Posts Tagged ‘real estate investing’

• Feb 1

  Despite Recoveries, the Real Estate Investing Market is Plummeting

  If you think selling a house is hard now, just wait until next year. And the year after that. And the year after that. And the … okay, you get the point. According to the latest Goldman Sachs forecast, real estate investing will hit rock bottom in 2013 and won’t recover to pre-crash levels until 2023. If you’re selling a house right now, that’s bad news no matter how you slice it.

  Until the government figures out what to do with all those foreclosures, far too many Americans will be underwater on their mortgages. Money will be squandered. Jobs will be lost. We’ll be helpless to change any of it.

  However, there’s a silver lining to every cloud, and in this case that lining comes in the form of small cities. Previously “obscure” metropolitan areas like Pittsburgh and Boston are all the rage right now, so if you’re lucky enough to own property in one of these markets, you should be able to find a buyer within a reasonable amount of time. Suburbs should also remain stable enough throughout 2013 as well, but we can’t make any promises.

  The biggest problem a real estate investor will face next year will be trying to sell properties in a small town or in a slumping city like Cleveland. The average market value is already in the pits in these areas, and it definitely won’t get any better in 2013. Our best advice for any investor with these sorts of properties is to get comfortable. Consider renting out vacant houses to offset costs. If you find a buyer, sell.

  We’ll be the first to admit that things aren’t looking good for anyone in the business of flipping houses, but that’s no reason to panic. The market will recover eventually – it always has. Until then, just do your best to grin and bear it, knowing that we’re right here with you.

  Tags: foreclosures, real estate investing, selling a house
  Posted in Home Selling | No Comments »

• Dec 22

  Getting Started with Wholesaling Real Estate

  Wholesaling real estate is a great way to get involved in the property market without truly owning a home. When a wholesaler buys a property, he or she puts the property under a contract, which is then sold to another investor at a higher price. The wholesaler pockets the difference. Wholesale deals are attractive to investors who know how to find distressed homes at deep discounts and then pass those savings on to other investors. As a middleman, the wholesaler can carve out a lucrative niche doing just that. Here’s how:

  • Sell your services intelligently. There are a variety of strategies wholesalers use to find properties. Some pound the pavement in down-and-out neighborhoods looking to pitch their services to homeowners facing foreclosure. Others advertise in local publications and subscribe to online wholesaler databases. Decide which strategies work best for you, and pursue them aggressively. You may have to invest in advertising to succeed.
  • Build relationships. Finding cheap properties is one important part of wholesaling real estate. Building the relationships that lead to sales is another. Develop a contact list of real estate investors and include those who specialize in buying wholesale homes (sometimes called “rehabbers”). By developing relationships with these influential individuals, you’ll have an interested pool of buyers who are eager to look at property purchased wholesale.
  • Know your seller. The person selling the home to you is a key part of the wholesale real estate investing process. Many of your prospects will be selling distressed homes, and they may already be in financial trouble. Find out as much about the seller as you can. By figuring out how desperate their situation is, you can price the home accordingly and pass on any deals to your investors.

  Without the right foundation in place, wholesaling real estate can go south quickly. But once you know the right people and develop the right real estate investing marketing strategy, you’ll be one step closer to wholesale success.

  Tags: real estate investing, wholesaling real estate
  Posted in Home Buying, Home Selling | No Comments »

• Dec 19

  A Guide to Property Value

  When buying or selling a home, several important factors determine property value – and it’s not just about a new set of cabinets or renovated tile work. Knowing which factors matter the most can help any investor maximize their purchase or profit further from a sale. Here’s what to pay attention to when assessing or optimizing property value:

  Location. There’s a reason the unofficial mantra of real estate investing is location, location, location. Everything from the average income of area residents to the quality of schools affects your property’s value. List the assets of the property’s location before you buy or sell. Also keep the area’s flaws in mind. But don’t worry if you haven’t purchased a house in the Hamptons. You can sell potential buyers on renovated or hip new neighborhoods as well.

  Bathrooms and kitchens. When it comes to interior renovations, kitchens and bathrooms punch above their weight. Cosmetic and structural renovations to these rooms can seriously impact property value. In fact, if you’re pressed for time or funds, focusing your improvements upon these two rooms will deliver the best return.

  Land. You don’t need to own an estate to benefit from the love affair investors have with land. Even a small parcel dramatically increases the value of your home. When you post pictures of your home or host potential buyers, emphasize the back yard, side yard or other land attached to the property. Take care to improve or maintain these areas in order to significantly enhance the value of your property.

  Evaluating property value with these factors in mind will help savvy individuals get the most out of real estate investing. Knowing what influences the list price is one of the best ways to become knowledgeable about real estate while making a tidy profit in the process.

  Tags: property value, real estate investing
  Posted in Home Buying, Home Selling | No Comments »

• Nov 22

  Is Zero-Down Investing a Good Idea?

  You hear the words “no money down” thrown around quite a bit these days on the real estate market, but is investing in a foreclosure or some other home that doesn’t require any money up front really a good idea? Well, it all depends. If you’re considering investing in a zero-down house, here are some things to consider.

  Can You Afford the Interest and Insurance?

  If you pay less than 10% of a home’s total price as a down payment, your lender will need some protection in case you default on your loan. For that reason, you’ll have to purchase private mortgage insurance. This means that in addition to the higher interest rates that zero-down loans carry, you’ll also have to cover monthly insurance premiums.

  If you’ve got a well-paying job but haven’t been saving your money, these costs can be manageable. However, if the reason you can’t make a down payment is that you’re already struggling to keep your head above water financially, then a zero-down mortgage isn’t going to solve any of your problems.

   

  How Long are You Planning on Living in the House?

  As a general rule of zero-down mortgages, if you attempt to sell your real estate investment within two years of buying it, you’ll be forced to cover 100% of the closing costs – which are often more than $1,000. On top of that, the increased costs of zero-down mortgages will make it hard for homeowners who’ve owned their house for less than five years to build up enough equity to make selling a house worthwhile.

  What’s it all mean? If you have to resort to a zero-down mortgage in order to afford a house, then you probably aren’t ready to handle the costs associated with owning one. These mortgages are costly, and they make it hard to generate enough equity to sell a home in a short amount of time. So when is zero-down investing a good idea? If you’ve got a lucrative job and just happen to be one of those people who spends their money as fast as they earn it, it might work for you. In any other case, it’s better to save your money until you can make a down payment, and then apply for a standard mortgage instead.

  Tags: foreclosure, real estate investing
  Posted in Home Buying | No Comments »

• Nov 7

  3 Things All Real Estate Investors Should Know

  Whether you’re flipping houses or just waiting on the market to improve, there are a few things that every real estate investor should know. You can make your experience painless and profitable as long as you follow these tips.

   

  1)    Know your area inside and out. The most successful real estate deals are the ones where you buy cheap and sell high. In order to do that, you either have to be a pro at rehabbing properties or you need to know your area well enough to tell where the future hotspots will be. In order to do that, you need to be familiar enough with your locale to see available real estate for its potential and knowledgeable enough about local housing trends to decide whether that potential can ever be realized.

   

  2)    Know how to negotiate. Buying a house is one thing, but turning a real estate investment into profit is something else entirely. A good real estate investor has to have a working knowledge of the market and has to know how to haggle over prices. Nothing in the world of real estate ever sells at sticker price, so it’s important to learn how to handle buyers who want to short-change you and sellers who want to fleece you.

   

  3)    Know how to network. No real estate investor is an island. In order to turn your hobby into a lifelong source of income, you need to be able to make connections with other sellers and buyers – it’s as simple as that. You can never have enough connections, especially when you’re trying to find a buyer or need a favor done. The best way to network is to be a people person. If you’re friendly and accommodating and willing to do favors for your contacts, they’ll treat you the same in return.

   

  The key to successful real estate investing is dynamism. You aren’t just your own accountant – you’re your own PR department and your own consultant as well. It’s not as hard as you think to play all these roles. As long as you know your market, make connections and always negotiate for a good deal, you’ll be ready for a lifetime of success.

  Tags: buying a home, real estate investing, selling a home
  Posted in Home Buying, Home Selling | No Comments »

• Oct 6

  Flipping Houses: Repair or Retail?

  Everyone in the business of flipping houses will eventually come across a real estate investment that needs so much work that it might seem easier to sell it “as is”  rather than performing the extensive remodeling necessary to get a market price. While you can still find a buyer either way, making the wrong decision could end up losing you thousands on closing day. Here’s a guide to help decide which option is best for you:

  • Cosmetic Damage. If your house needs new drywall, carpeting or other cosmetic repairs, you might be tempted to sell “as is” and save yourself the effort of fixing it all yourself. This is not a good idea. If you list a home in need of a new roof or windows, you’ll end up losing at least twice what it costs to repair the damage. These projects are the best way to turn your investment into income, so you should always choose repair.

   

  • Structural Damage. On the other hand, repairing a house with broken support beams or leaning walls often takes more money than it’s worth. If you’ve discovered that the fixer-upper you bought is only a hair’s breadth away from being condemned, it’s best to accept your loss and retail it.

   

  • Missing or Damaged Appliances. Like cosmetic damage, appliances are always worth repairing. It costs only a few hundred dollars to repair or replace an old dishwasher, but you can lose thousands if you take no action. Repairing your appliances and replacing your linens are mandatory steps if you plan to list your home on the market.

  When it comes to deciding whether to retail or repair a home, the bottom line is that repairs are always worth it unless you are physically or financially unable to do them. You can make a bigger profit by fixing up a home than by selling it as a project for someone else.

  Tags: property value, real estate investing
  Posted in Home Improvement, Home Selling | No Comments »

• Sep 14

  Terms Every Real Estate Investor Should Be Familiar With

  The language of real estate can be confusing – especially all the legal jargon, like “escrow” and “liens.” If you’re going to be successful on the real estate market, though, you need to be able to speak this language fluently. Whether you’re an ambitious investor or you’re just trying to sell your house, here are four real estate terms you should be familiar with.

   

  • Escrow. If you’re selling your house, this is a term you should know. The word “escrow” refers to money held by a neutral third party to be distributed according to a set of instructions. When you list your house on the market, banks will often have you open an escrow account to make sure that the homeowner’s insurance and taxes are paid on time. Trying to move can be stressful, but it’s even worse if you need to remember to make large, periodic payments. By holding money in escrow, you can get the bank to pay your fees for you.

   

  • Liens. A lien is a claim or hold on a property, and you’ll sometimes hear this word when you attempt to buy a foreclosed home. If the previous owner didn’t pay property taxes to the state or was behind on their insurance, a lien can be placed on the property so that the new owner is forced to pay off the debts before they can take the title for their own. Typically, you want to avoid buying a house that has a lien on it – and make sure to never get a lien placed on your own home, because it could kill the property value.

   

  • Refinancing. Refinancing your home is the act of renegotiating the terms of your mortgage to adjust the rate or length of the loan. This can be a good decision if you have a 30-year loan and you suddenly find yourself in a better spot financially. When this happens, you can increase your payments so that the loan will be paid off in 10 years instead.

   

  These are only a few of the terms that every real estate investor should be familiar with. Remember that you can’t control a situation you don’t understand, so if you’re buying, selling or flipping a house, make sure to learn the definition of every confusing phrase or word you come across.

  Tags: real estate investing, real estate terms
  Posted in Uncategorized | No Comments »

• Aug 1

  4 Improvements for Wholesalers to Make Today

  It doesn’t matter if you’re just starting out with wholesaling real estate or you’ve been in the real estate investing world for years: you could probably stand to improve. After all, who doesn’t want to make more money, have a bigger list or sell properties faster? In fact, making changes to your business doesn’t have to be a grueling process, and a small step towards improvement is better than stagnation. Before today’s over, why not make one of these changes?

   

  1.    Shake up your signage. Are you a fan of front-yard signs? What about hanging fliers in particular neighborhoods? Get out of your advertising rut and try something new. Whether you draw up entirely new signs in bright colors or just hang your fliers in a slightly different part of town, switching up your ads can help you garner new clients and may even lead you to new properties.

  2.    Look for landlords. Wholesaling real estate is all about buying a property cheap and finding a buyer fast. Who better to buy your property than somebody who already has a stake in the neighborhood? Take a drive through town and look for buildings and offices that are for rent. If you have a property you need to sell in that area, try calling up the landlords there. They’re already in the real estate investing game, so they may just be your next buyer.

  3.    Check out your competition. Are you signed up for other wholesalers’ e-mail lists? If not, you should be, because those lists can give you great insight into what your competitors are doing around town. Depending on whether you’re working with residential or commercial properties, you might even want to find non-local real estate investing people who specialize in your niche.

  4.    Set a goal. If you sold your last property in two weeks, why not try to sell your next one in a week and a half? Setting challenging but realistic goals can give your business a much-needed jolt, and it’ll help you improve, too.

   

  Wholesaling real estate is a fun and worthwhile first or second career – and making improvements can make it even more lucrative. Whether you overhaul your entire system or just hang up a couple of extra fliers, making smart changes can help get your real estate investing business booming again.

  Tags: real estate investing, wholesaling real estate
  Posted in Home Buying, Home Selling | No Comments »

• Jul 25

  Is Flipping Real Estate a Solid Investment?

  When many people think about real estate investing, they think about flipping real estate, and with shows like Flip This House dominating the airwaves, it’s no wonder. But in today’s market, is flipping real estate still the solid moneymaker it was in the past?

   

  Traditionally, flipping real estate simply meant purchasing a property at a low price and selling it as a slightly higher (but still low) price. Today, people who perform these types of real estate transactions are known as wholesalers. When you flip, you’re doing something more. Although all the television shows call the process “flipping,” you’re also rehabbing properties. It’s more time-consuming than wholesaling properties. After all, you have to manage a crew, stick to a timeline and sell a home – all while staying under budget. Can you still make money following this more complex process?

   

  Absolutely! Rehabbing and re-selling is form of real estate investing that can work for anyone who makes careful decisions. At its heart, flipping real estate is about finding a low-priced property, doing your renovations and selling at or slightly below the market price. As long as the cost of your renovations doesn’t price the home out of the market or exceed your profits, you will be able to make money with flips.

   

  The trick to real estate flips in today’s market is finding a property at a great price. You’ll need to be able to negotiate and bargain-hunt for excellent deals in your area. Although seeking out foreclosures can be an easy way to find a cheap home, fantastic properties can still be found on the housing market – particularly if a family needs to sell fast to stop foreclosure.

   

  Although you may not be able to get away with some of the flipping tips they show on television (marble counters aren’t the right choice for every neighborhood, after all!), you can still find a fixer-upper and get it in shape for a sale. The heyday of elaborate flips may be over, but hey – that just means you’ve got less competition. So why not enter the real estate investing business by seeking out a deal and turning it into somebody’s dream home?

  Tags: real estate investing
  Posted in Uncategorized | No Comments »

• Jul 13

  5 Improvements Real Estate Investors Can Make Today

  Real estate investing can be a tricky business with plenty of highs and lows. Smart real estate investors know that what works for one deal may not be the best option for the next. If you’re looking to change things up, here are a few options you might consider:

  1.    Research a new area. Real estate investors tend to focus on one area – such as multi-family homes – before moving on. If you’re looking for a new deal, why not research a different niche? You may find there are opportunities in your area for types of real estate investing that you haven’t yet explored. Broadening your perspective never hurts, either. You might come up with new and fresh ideas for your current investments.

  2.    Amp up your networking. Real estate investing is all about knowing people and making deals with them, so check in with your network. Ask your contacts how business is going. This help you build stronger relationships with real estate investors in your area, and you might also discover opportunities you didn’t know about.

  3.    Reorganize your office. Sometimes simple things can make a big impact, and reorganizing your office may help you see what changes you need to make in other areas of your life. If you don’t want to organize your entire space, just pick one area. Those file cabinets could use an overhaul. Surely something in there will spark a new idea …

  4.    Read up on productivity tips. Productivity tips for real estate investors can help you work faster, better and smarter. Save time by streamlining your day and working more efficiently. You’d be surprised at how much time in a day is wasted, so look for opportunities to improve.

  5.    Consider your partners. Many real estate investors work with one or several partners to accomplish their deals. Looking into new and different partners may give you opportunities for new investments. If you don’t have a partner, consider adding one for your next deal. All that networking you did earlier should come in handy here!

  If you’re in the real estate investing business, sometimes small changes can make a big difference. Boost your business by taking a step towards something new today.

  Tags: real estate investing, real estate investors
  Posted in Uncategorized | No Comments »